Providing you with a short summary of events from around the world. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Blackfinch Group
Monday Market Update

The ever-changing world we live in reinforces the importance
of regular up-to-date communication. This weekly news update from our
multi-asset portfolio managers provides you with a summary of global events
 for your reference and to share with clients.

Issue 112 | 3rd October, 2022

UK COMMENTARY

  • UK markets experienced wild movements in response to the UK government’s ‘mini-budget’ on 23rdSeptember. Swathes of the pension system were at risk as widespread concerns were raised about the UK’s financial stability. Facing a market meltdown, the Bank of England stepped in with a £65bn package to buy long-dated government bonds (gilts).
  • The yield, or interest rate, on the benchmark 10-year UK government bond reached a high of 4.5% before the Bank’s emergency intervention. This was the highest level since the financial crisis in 2008, piling pressure on mortgage holders, as gilt yields have an impact on swap rates which guide mortgage offers from lenders.
  • Chancellor Kwasi Kwarteng’s mini-budget heightened expectations of a jump in the Bank of England’s base rate to 6% by next summer, and in response, UK lenders took 41% of mortgage products off the market.

NORTH AMERICA COMMENTARY

  • The final September reading of the University of Michigan's Consumer Sentiment Index fell 0.9 points to 58.6, a significant drop from the preliminary reading of 59.5, though still 0.4 points above August.
  • US inflation expectations fell 0.1% to 4.7% in September, due to lower gas prices and decelerating inflation. This was the lowest since September 2021.

EUROPE COMMENTARY

  • In the Eurozone, inflation hit a record high of 10% in September, according to Eurostat, raising expectations for another big interest rate hike from the European Central Bank.
  • Inflation in Germany jumped from 8.8% in August to 10.9% in September, Germany’s highest level in over 25 years. In Italy, inflation increased from 9.1%, to 9.5%, while inflation in France slowed from 6.6% to 6.2%.
  • The European Commission reported that the unemployment rate in the Eurozone was 6.6% in August, considered stable when compared with July, and down from 7.5% in August 2021.

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